Curious about Hormel (HRL) Q2 Performance? Explore Wall Street Estimates for Key Metrics

Analysts forecast Hormel's upcoming quarterly earnings per share to be $0.35, a 7.9% year-over-year decline, with revenues expected to increase slightly by 0.6% to $2.9 billion. While international and foodservice net sales are projected to increase by 7% and 2.3% respectively, retail net sales are expected to decrease by 0.8%. Hormel's stock has underperformed the S&P 500 over the past month, and currently holds a Zacks Rank #4 (Sell), indicating potential underperformance in the near term.

Analysis

Wall Street analysts anticipate Hormel Foods (HRL) will report quarterly earnings of $0.35 per share for its upcoming Q2 release, representing a 7.9% year-over-year decline, despite a projected slight consolidated revenue increase of 0.6% to $2.9 billion. The consensus EPS estimate has remained stable over the past 30 days, suggesting a consistent analyst outlook during this period. Segment performance forecasts are mixed: 'Net Sales- International' is expected to grow by 7.0% to $178.43 million and 'Net Sales- Foodservice' by 2.3% to $953.29 million. Conversely, 'Net Sales- Retail', the largest segment, is projected to decline by 0.8% to $1.77 billion. Profitability appears challenged across key domestic segments, with 'Segment Profit- Retail' anticipated to fall significantly to $112.33 million from $132.40 million a year ago, and 'Segment Profit- Foodservice' to slightly decrease to $147.62 million from $149.30 million. 'Segment Profit- International' is the only segment where profit is expected to see a modest increase to $23.85 million from $23.20 million. Reflecting these headwinds, HRL shares have underperformed, returning -2.5% over the past month compared to the Zacks S&P 500 composite's +10.7% gain. The stock currently holds a Zacks Rank #4 (Sell), indicating expectations of near-term market underperformance.

Key Decisions for Investors

• Investors should exercise caution with Hormel Foods, reflecting the projected 7.9% year-over-year EPS decline, recent stock underperformance, and its Zacks Rank #4 (Sell) rating.
• Closely scrutinize the upcoming Q2 earnings release for actual performance against these specific analyst estimates, particularly focusing on the Retail segment's sales and profitability, and the Foodservice segment's profit, which are flagged as areas of concern.
• Evaluate the extent to which growth in International sales and profit can offset the significant challenges and profit erosion anticipated in the larger Retail segment and the Foodservice profit contraction.